Introduction to Managerial Accounting Practice Exam
Course Introduction
Introduction to Managerial Accounting provides students with a foundational understanding of how accounting information is used within organizations to aid in planning, controlling, and decision-making. The course explores key concepts such as cost behavior, budgeting, performance evaluation, and the development of financial statements relevant to internal management. By analyzing case studies and practical exercises, students learn how managerial accounting supports strategic business objectives, enhances operational efficiency, and guides managers in making informed financial decisions.
Recommended Textbook
Cornerstones of Managerial Accounting 3rd Canadian Edition by Maryanne Mowen
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14 Chapters
2190 Verified Questions
2190 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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66 Flashcards
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Sample Questions
Q1) Time is NOT a crucial element in all phases of the value chain.
A)True
B)False
Answer: False
Q2) Which of the following employees would normally occupy a line position in a hospital?
A)the manager of the cafeteria
B)a hospital administrator
C)the chief of surgery
D)a staff nurse
Answer: C
Q3) Which of the following activities does the controller of an organization participate in?
A)controlling, planning, and assessing
B)decision making and assessing
C)planning, assessing, and decision making
D)planning, controlling, and decision making
Answer: D
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Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) Which of the following is an example of a tangible product?
A)funeral care
B)legal services
C)furniture
D)video rental
Answer: C
Q2) (total manufacturing costs + work in process beginning work in process ending)/units produced
A)Per-unit prime cost
B)Per-unit conversion cost
C)Per-unit cost of goods manufactured
Answer: C
Q3) Refer to the Figure.What was the conversion cost per unit?
A)$50
B)$75
C)$95
D)$125
Answer: B
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4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) Which of the following is likely a fixed cost in a fast-food restaurant?
A)cost of flour for pizza crust
B)cost of pepperoni for pizza topping
C)shift manager's salary
D)monthly electric bill
Answer: C
Q2) Suppose that at a given volume,total costs and fixed costs are known.How are the variable costs per unit computed?
A)(total costs fixed costs)/unit volume
B)(total costs/unit volume) fixed costs
C)(total costs × unit volume) (fixed costs/unit volume)
D)total costs (fixed costs/unit volume)
Answer: A
Q3) Computing fixed costs per unit may result in misleading information.
A)True
B)False
Answer: True
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Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) Firm X and Firm Y compete within the same industry.Firm X manufactures its product using large amounts of direct labour.Firm Y has replaced direct labour with investment in machinery.Projected sales for both firms are 15% less than in the previous year.What will be the projected profits for Firm X compared to Firm Y?
A)Firm X will lose more profit than Firm Y.
B)Firm Y will lose more profit than Firm X.
C)Firm X and Firm Y will lose the same amount of profit.
D)Neither Firm X nor Firm Y will lose profit.
Q2) Refer to the Figure.What is the break-even point in units?
A)6,667
B)10,000
C)13,333
D)20,000
Q3) The linear equation for total cost is (unit variable cost × units)+ fixed cost.
A)True
B)False
Q4) Most firms would like to earn operating income equal to the break-even point.
A)True
B)False
Q5) Explain why cost-volume-profit analysis can be useful to managers.
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Chapter 5: Job-Order Costing
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) When using normal costing,which costs never enter the work-in-process account?
A)applied overhead
B)actual overhead
C)direct materials
D)direct labour
Q2) Form prepared every time a new job is started
A)Job-order cost sheet
B)Time ticket
C)Materials requisition form
Q3) Discuss overapplied and underapplied overhead.
Q4) For which of the following are time tickets filled out?
A)indirect labourers
B)direct labourers
C)managers
D)supervisors
Q5) Which of the following costs is NOT included on a job-order cost sheet?
A)direct material costs
B)applied factory overhead costs
C)direct labour costs
D)actual factory overhead costs
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Chapter 6: Process Costing
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157 Flashcards
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Sample Questions
Q1) Computation of unit costs
A)Step 1 in preparing a Production Report
B)Step 2 in preparing a Production Report
C)Step 3 in preparing a Production Report
D)Step 4 in preparing a Production Report
E)Step 5 in preparing a Production Report
Q2) Cost reconciliation
A)Step 1 in preparing a Production Report
B)Step 2 in preparing a Production Report
C)Step 3 in preparing a Production Report
D)Step 4 in preparing a Production Report
E)Step 5 in preparing a Production Report
Q3) It works well whenever relatively homogeneous products pass through a series of processes and receive similar amounts of manufacturing costs.
A)Parallel processing
B)Sequential processing
C)Process costing
D)Weighted average costing method
Q4) Refer to Process Department A.What is the unit manufacturing cost for Department A for October?
Page 8
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Chapter 7: Activity-Based Costing and Management
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154 Flashcards
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Sample Questions
Q1) Inspection time for a plant is 20,000 hours per year.The cost of inspection consists of the salaries of four inspectors,totalling $120,000.Inspection also uses supplies costing $6 per inspection hour.The company has a close to zero-defect state and has eliminated the need for any inspection activity.What is the non-value-added cost of inspection per year?
A)$30,000
B)$120,000
C)$240,000
D)$480,000
Q2) Factors that measure the consumption of activities by products and other cost objects are value-added costs.
A)True
B)False
Q3) Refer to the Figure.What is the overhead cost per unit for high-end laptops when using a plantwide rate that is based on direct labour costs?
A)$21.00 per laptop
B)$14.00 per laptop
C)$10.00 per laptop
D)$7.00 per laptop
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Page 9
Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) Refer to the Figure.What is the segment margin for Division South?
A)$140,000
B)$210,000
C)$240,000
D)$310,000
Q2) Refer to the Figure.What is the operating income under variable costing?
A)($540)
B)$3,540
C)$3,740
D)$7,980
Q3) Refer to the Figure.What was the net income for July using absorption costing?
A)$20,000
B)$40,000
C)$50,000
D)$80,000
Q4) Which of the following is NOT a traditional reason for carrying inventory?
A)to satisfy customer demand
B)to avoid shutting down manufacturing facilities
C)to support a reliable production process
D)to hedge against future price increases
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Chapter 9: Budgeting, production, cash, and Master Budget
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165 Flashcards
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Sample Questions
Q1) A company requires 400 kg of plastic to meet the production needs of a product.It currently has 40 kg of plastic inventory.The desired ending inventory of plastic is 120 kg.How many kilograms of plastic should be budgeted for purchasing during the coming period?
A)160 kg
B)200 kg
C)480 kg
D)520 kg
Q2) Which of the following is a characteristic of budgets?
A)They are key components of recording a financial history.
B)They reflect on financial plans of the past.
C)They are identifiers of objectives and the actions needed to achieve them.
D)They are created once during the life of the business.
Q3) The cash budget includes the beginning balance of cash,cash receipts,cash disbursements,and the ending balance of cash.
A)True
B)False
Q4) Leads to budgetary slack
A)Advantage
B)Disadvantage
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Chapter 10: Standard Costing: a Managerial Control Tool
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173 Flashcards
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Sample Questions
Q1) Actual usage of inputs is greater than the standard usage.
A)Favourable variance
B)Unfavourable variance
Q2) How are costs assigned in a standard cost system?
A)actual direct materials, actual direct labour, and budgeted manufacturing overhead
B)actual direct materials, actual direct labour, and actual manufacturing overhead
C)standard direct materials, standard direct labour, and standard manufacturing overhead
D)budgeted direct materials, standard direct labour, and standard manufacturing overhead
Q3) Kaizen costing involves which of the following?
A)changing the standards frequently
B)changing management
C)outsourcing processes
D)creating major ad campaigns
Q4) How are standards developed?
Q5) Explain the kaizen approach to costing.
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Although general responsibility for the volume variance is usually assigned to the purchasing department,responsibility on occasion may be assigned to the production department.
A)True
B)False
Q2) What are the two variances for fixed overhead?
A)budget and efficiency
B)efficiency and usage
C)volume and spending
D)usage and volume
Q3) Refer to the Figure.What is the fuel budget for the year for moving materials?
A)$12,000
B)$28,000
C)$36,000
D)$48,000
Q4) The variable cost component for each activity should correspond to the committed resources.
A)True
B)False
Q5) What is a performance report?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Refer to the Figure.Calculate the following:
A. Conversion cost in minutes
B. Theoretical conversion cost per unit
C. Actual conversion cost per unit
D. How much more is the department spending per application than it should be if perfect efficiency could be attained?
Q2) Return on investment (ROI)is the most common measure of performance for a revenue centre.
A)True
B)False
Q3) What is the best transfer price when the transferred product has a competitive outside market?
A)the cost-based price
B)the negotiated price
C)the market price
D)the price set by central management
Q4) Transfer pricing does not affect divisional profits.
A)True
B)False
Q5) What are the advantages and disadvantages of return on investment (ROI)?
Page 14
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) Winston Custom Cabinetry makes cabinets to order and prices the completed jobs at product cost plus 40%.Recently,Winston finished a job and billed the customer $560.Suppose direct materials for the job cost $130 and direct labour cost $180.What was the applied overhead for the job?
A)$90
B)$179
C)$250
D)$350
Q2) Refer to the Figure.Suppose Alpha Company can sell only 5,500 units of each model.How many units of Model P-4 should be produced?
A)1,375
B)2,750
C)5,000
D)5,500
Q3) The second step in making a short-run decision is to define the problem. A)True B)False
Q4) Why does a special-order decision frequently ignore fixed factory overhead?
Q5) What are the six steps of the decision-making model?
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Which of the following is NOT a benefit of postaudits of capital investments?
A)They consider changes in the actual operating environment.
B)They guide managers to make capital investment in the best interests of the firm.
C)They ensure that resources are used wisely by evaluating profitability.
D)They supply feedback to managers that should help improve decision making.
Q2) The following information pertains to an investment: What is the present value of the annual cash flow (rounded to the nearest whole number)?
\[\begin{array} { l r }
\text { Investment } & \$ 140,000 \\
\text { Annual revenues } & \$ 96,000 \\
\text { Annual variable costs } & \$ 32,000 \\
\text { Annual fixed out-of-pocket costs } & \$ 20,000 \\
\text { Discount rate } & 12 \% \\
\text { Expected life of project } & 8 \text { years } \end{array}\]
A)$136,822
B)$152,538
C)$204,884
D)$218,592
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Page 16